Investor Seminar:Your First Investment Property.

Real Estate

Investor Seminar:Your First Investment Property.

on Sunday July 24TH 2-4PM @3914 N Troy St, Chicago, IL 60618-3408, United States

Click for directions and info

Today I spent some time talking with a client about how she can dive into the exciting world of "investing". Her main reason for reaching out was that she has baby #2 on the way and doesn't want to be in the same predicament she found herself the first time around; meaning having to count one one source of income during a time where her family's expenses almost doubled overnight. It is no secret that here in the states most families get no or very little paid maternity/paternity leave. What she needs is to be able to take off as much time as she wants and have another source of income- aka as the "American Dream".

She has watched me grow from a renter to an owner to a part-time investor/real estate entrepreneur and short sale ninja, and was looking for guidance to help her accomplish this. After this discussion, I realized the questions she asked me were the same questions so many others have.

“How do I start?”
“What should I buy?”
“How can I make sure I don’t fail?”

"How much Work is involved"

"Whats best type of property you should buy if you are just starting out and looking to find a better use for your time and money. "

The answer may surprise you.

These property types are everywhere. The city, the suburbs, the country. They are found in high-income areas, middle-class, and low-income neighborhoods. They can be ugly, beautiful, large, small, new, or old. I’m talking, of course, about small multifamily properties. Specifically, I’m talking about duplexes, triplexes, and four-plexes.

Just in case you don’t know:

Duplex = two units
Triplex = three units
Four-Plex = four units (also called a “quad”) and is considered an commercial property by the state of Illinois.
I believe these property types are the best investment for most beginners. Why would I make such a bold statement as this? Because there are so many benefits to owning small multifamily properties. I can give you a good idea of why I’m such a fan of these property types and how you can add significant wealth to your life by investing in them.


“Your home is not an investment.”
-Robert Kiyosaki
If you are a “Rich Dad Poor Dad” fan (if not, you should be) you’ll recognize this quote. Most of us have grown up with the belief that “your home is the biggest investment you’ll ever make.” its Just Simply not True.

Rich Dad Poor Dad points out – your home is a horrid investment. It costs money every month to own, requires constant attention, and will probably never gain more value than the amount it costs you to hold each month. Think about it – if you are spending $1000 per month on a mortgage payment and another $100 on repairs – you are losing over $13,000 per year on that deal. Do you really think that home is gaining $13,000 per year in value, every year? Although it may be increasing in value, its appreciation is no where near $13,000 per year.

I’m not telling you that you need to abandon your dream of home ownership and take up residence under your local bridge or homeless shelter. The simple fact is – you need a place to live. Whether you are renting a place (throwing money out the window) or own a nice house, a personal residence is a necessity in life. An investment property is an additional source of income and security for LIFE.

There is a way you can have BOTH and live for free while building long term wealth.

By purchasing a duplex, triplex, or four-ilex, you have the unique ability to combine your basic human need for a roof over your head with your desire for wealth building. You can live in one unit while renting the other units out for profit.

For example, you purchased a small duplex in a middle-class neighborhood. The property contained two homes on one small lot. Two-weeks after closing on the home, you move in to the smaller of the two homes and rented the larger home out. The rent from the larger home will pay for the entire mortgage, taxes, and insurance allowing you to live for free (within reason ) Later, you can move out and hold both homes as rentals – and I guarantee you will be loving the cash-flow that pours in each and every month.

Perhaps you have a lot of money. Maybe you were born a Rockefeller or Trump. Maybe you are compulsive saver and have been setting aside 25% of your check for years (good for you!). Put 5% down and go get your investment!

But for the majority of people don't have any money when they start, there is still a way to purchase an investment property with little down. While most real estate investments require a 20% down payment – you can purchase your own personal residence for just 3.5% down with a FHA loan through most lenders. That means, if you buy a home for $100,000 you only need to pay $3,500 to do so (plus closing costs, which you can usually get the seller to pay for). Woo woo sign me up right???

I don’t know about you, but $3,500 sounds a heck of a lot better than $20,000.

The great thing is – this 3.5% down payment applies to either a single family home or a multi-unit! If you utilize the FHA 203K remodel loan – you can even incorporate repair costs into the loan. So, if you find a four-plex for $100,000 that needs $10,000 in paint and carpet, you can include those costs into the loan and borrow $110,000.00 for the home (less your 3.5% down payment on the $110,000), only putting down $3,500.

Lender's are much more friendly to “personal home buyers” than investors and offer lower rates and easier qualifying standards. This means it is easier to finance a property if it is your own home. Clearly, purchasing a duplex, triplex, or four-plex combines the lending benefits of a personal home with the investment power of income-producing property. This. Is. Awesome.

Lower Your Risk = Thicken Your Wallet

I don’t like to lose. I doubt you do either. It’s in our human nature to strive to excel – so it makes perfect sense that you’d be nervous to jump into a real estate investment. Some people spend years talking about investing but never actually jump in. Maybe this is you?

Buying a small multifamily property not only makes financial sense, but is also the SAFEST path you can take to make big money in real estate.

I’ll say that again: small multifamily buildings are the safest path you can take to make big money in real estate.

When you have more than one unit, the risk is spread out. When one unit goes vacant, you still have the rent from another. If your expenses increase slightly, you can weather it. Furthermore, your ability to manage efficiently and effectively will determine your success, not the whims of the market or hopes and dreams.

Additionally, you will be able to use this first property as a launch pad for your future investments. This property will build your confidence as an investor and open doors that you didn’t even know existed. You will become a "doer” rather than just a dreamer. Perhaps you can even use this first property (because it’s your primary residence) to do a cash-out refinance and pull out money to buy other properties.

The possibilities are endless.

If you are intrigued by my rambling I will be doing more of it at my Investor Seminar:Your First Investment Property.

on Sunday July 24TH 2-4PM @3914 N Troy St, Chicago, IL 60618-3408, United States